Premiumisation has emerged as a key growth engine for India’s alcohol beverages sector, the International Spirits & Wines Association of India (ISWAI) said in a just-released report. The premium segment grew at a 10.2% CAGR between 2022 and 2025, compared with 1.4% for regular products, the report noted.

Further, ISWAI, which counts Bacardi, Brown Forman, Campari Group and Diageo-United Spirits among its members, added that the economic value of India’s alcobev industry reached Rs 6.2 lakh crore in CY2025, equivalent to approximately 1.8% of India’s nominal GDP.

Sanjit Padhi, chief executive officer, ISWAI, said: “The next opportunity is to drive premiumisation, strengthen value chains and build globally competitive Indian businesses.”

Calling out to the prevailing economic environment within which the sector operates, Padhi said that despite its significant economic footprint, the industry continues to operate within a fragmented regulatory environment, with substantial state-level variations in taxation, licensing, pricing controls, distribution systems and compliance requirements. According to the report, structural challenges will be important to unlocking the industry’s full economic potential.

The report said the sector generated an estimated Rs 4 lakh crore in tax revenues during FY2024-25, the report noted, adding that the sector’s total tax contribution was equivalent to approximately 1.3% of India’s nominal GDP for FY 2024-25.

ISWAI also noted that 14-19% of revenue in the foods and beverages industry are linked to alcohol sales. “Organised off-premise alcoholic beverage retail supports an estimated 4.8 lakh jobs,” the ISWAI report added. The sector currently supports an estimated 9.2 lakh to 11 lakh jobs in alcohol-licensed food and beverage outlets, with nearly 1.32 lakh licensed on-premise and off-premise retail outlets selling alcoholic beverages across India.

It added that several states have undertaken reforms focused on transparency, digitisation and ease of doing business, but added that greater regulatory consistency, rationalised taxation and pricing, digital compliance and modernised distribution will be crucial to unlock further investments, strengthen formalisation and support sustained economic growth and value creation.